Claridges Hotels & Resorts is looking at an overseas float to mop up a part of the Rs 2,500 crore it plans to invest in expansion.
Move to fund a part of the Rs 2,500 cr expansion plans lined up
KOLKATA: Claridges Hotels & Resorts is looking at an overseas float to mop up a part of the Rs 2,500 crore it plans to invest in expansion. The preferred destination for the issue would be Europe.
The company is also considering an initial public offer (IPO) for mopping up further resources in the domestic market, sometime next year.
The balance is to be funded out of internal accruals.
“The company’s cash-flow situation is strong,” Peter Leitgeb, CEO and president, Claridges, told DNA Money.
The Rs 2,500 crore outlay would be invested over a long term, with the company looking to add one property every year.
Three new destinations could be on Claridges’ radar — Kerala, Chennai and Rajasthan. “Kerala is the hottest luxury destination and we need to explore this,” Leitgeb said.
A property in Rajasthan made sense because of the European traffic, while Chennai has been registering 75% occupancy levels of late, he added.
Also, with these three properties, Claridges could be taking the management and operations (M&O) route for the first time. “We are discussing all opportunities - equity stake, M&O, etc… nothing has yet been finalised,” Leitgeb said.
“We could be looking at a 50:50 ratio of management contracts and own properties,” he added.
The company’s latest hotel, slated to open in 2008, is a Rs 250-crore, 250-keys property at Surajkund. It is being given a dual positioning - it will target the business and MICE (meetings, incentives, conventions and exhibitions) segment during the week and leisure crowd over the weekends.
Meanwhile, Hotel Searock, Mumbai, is being refurbished with an investment of about Rs 800 crore. It will open in 2010 as a “superior deluxe hotel,” along with a mall, which would also be owned by Claridges.
The company has a letter of intent with Mandarin under which the latter would manage the property sitting in one of Mumbai’s best locations. While Searock will house 90 residencies, Surajkund will have 40.
Claridges also owns and runs the Claridges New Delhi, the Nabha Palace Musoorie and Atrium Hotel, Delhi.
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